SBI classifies Anil Ambani-led Reliance Communications' loan account as ‘fraud’. What does it mean?
Last year, state-run Canara Bank also tagged the RCom loan account as ‘fraud,’ a decision that the Bombay high court stayed.
The State Bank of India (SBI) has classified the loan account of Anil Ambani's Reliance Communications (RCom) as ‘fraud’, the bankrupt telecom company claimed.
RCom filed a securities filing on Tuesday, disclosing the move of India's biggest lender. Last year, state-run Canara Bank also tagged the RCom loan account as ‘fraud', a decision that the Bombay high court stayed.
Reliance Communications is part of the group led by Anil Ambani, the brother of India's richest person, Mukesh Ambani, who chairs the oil-to-telecoms conglomerate Reliance Industries. According to Reuters, Reliance Communications disclosed in April that as of March 2025, it had a total debt of ₹40,400 crore.
What does SBI tagging Anil Ambani's Reliance Communications loan account as ‘fraud' mean?
Under Indian banking laws, once an account is reported as fraudulent, it is referred to enforcement agencies for criminal action, and the borrower is barred from securing any more finance from banks and other regulated financial institutions for an initial period of five years.
The SBI classified the Reliance Communications loan account as ‘fraud' after finding alleged diversion of loan funds in transactions dating back to 2026.
The SBI said it gave Anil Ambani and the company several chances in the past two years to respond to the allegations of fraud in loans taken out in 2016 from Indian banks that were subsequently classified as bad or non-performing, but found their replies "insufficient".
SBI's letter also said it would report Anil Ambani to the Reserve Bank of India, in compliance with Indian banking regulations. Ambani was a director of Reliance Communications, which is currently undergoing insolvency proceedings.
In the filing, Reliance Communications said that the insolvency proceedings protect it from orders by any other authority or court of law.
"Legal advice is being sought on the way forward with respect to this development," the company said.
Anil Ambani’s counsel responds to SBI’s letter
Anil Ambani’s counsel, in a statement, said that SBI’s order is in direct contravention of judgments of the Supreme Court, Bombay high court, and RBI guidelines.
“SBI's order is in direct contravention of various judgments of the Hon’ble Supreme Court and the Hon’ble Bombay High Court, as well as RBI guidelines,” the statement said.
The counsel added that despite repeated requests, SBI did not respond to Ambani’s communications about the show cause notice (SCN) for nearly a year, nor provided the information behind their decision to allow him to respond to the SCN.
“SBI has not even responded to Mr. Ambani’s communication about the invalidity of the Show Cause Notice (SCN) for almost a year, and has not even provided the information forming the basis of their decision despite being repeatedly requested by Mr. Ambani, to enable him to respond to the SCN,” the statement reads.
The counsel said, “SBI has also not allowed Mr. Ambani an opportunity of personal hearing to make submissions against its allegations.”
“SBI has withdrawn the show cause notice to other non-executive and independent directors of RCOM. Mr. Ambani was also a non-executive director and not involved in the day-to-day affairs of RCOM, and has been wrongly so categorized,” the statement added.
